Medicare Premiums and Cost of Health Care Once on Medicare
Does the program estimate Medicare premiums based on my income each year? And how does it handle medical expenses that Medicare doesn't cover?
You can have the program calculate Medicare premiums for parts B and D for you using the setting you see below called 'Use Program Estimate for Medicare Parts B & D Premiums'. The program uses your projected income and the income-related monthly adjustment amount (IRMAA) to calculate this.
The federal government looks back two years for income for this calculation. However, because the program does not know your income from two years ago unless the projection is at least three years from today, the program will use the current year's income in the first two years of projections and then looks back two years after that.
You will also note entries in the Goals & Additional Expenses section for medical costs in addition to Medicare premiums. These are for items that Medicare doesn't cover, such as dental and vision, as well as average co-pays.
